OT: Ford to stop producing (nearly all) sedans and hatchbacks
Figured this would be of interest, given that many of us have connections to the Detroit auto industry (and Hackett). Sad for me as I love the Focus RS and ST. LINK.
Dearborn — Ford Motor Co. plans to trim $25.5 billion in operating costs by 2022 and cut its North American passenger car lineup by more than 80 percent, eliminating the Taurus, Fiesta, Fusion, C-Max and Focus sedans within a few years.
CEO Jim Hackett said Wednesday that Ford will not make the next generation of those sedans, confirming months of reports that the automaker was considering cutting some of its unprofitable car models in favor of trucks and SUVs. The Mustang will be soon be Ford’s only car; the new Focus will launch next year in North America as the Chinese-built Focus Active crossover.
That’s a deeper cut to the car lineup than industry analysts expected. That move, coupled with the reduction in operating costs and a plan to reduce capital spending from 2019 to 2022 by $5 billion announced Wednesday, come from the “fitness” initiative Hackett outlined in October.
Yugo, you don't come back
That went over your head.
April 26th, 2018 at 11:32 PM ^
April 26th, 2018 at 12:50 PM ^
This seems like an overreaction when they could have just cut the Taurus and Fiesta. Keep the Focus and Fusion and share as much as possible with the SUVs/ CUVs.
April 26th, 2018 at 12:53 PM ^
Couldn't agree more. They also have the basis for a larger car based on the Continental that, to my knowledge, they'll still produce.
Also, does this mean they're out of fleet (police) entirely except for the Explorer?!? They sell thousands of cars for this purpose....wow
I don't believe they will still produce the Continental. It's not selling well and I thought they weren't going to produce it past 2020.
Continental is not based on the NA Taurus, it is based on an entirely new Taurus available only in China.
I don't think they've sold Taurus police vehicles in quite a few years already... They were planning on a Fusion police vehicle though, saying it was going to be the first hybrid police car.
April 26th, 2018 at 12:57 PM ^
Scratching my head at the decision to stop making the Focus in particular.
There's a few factors here. Sales for regular cars are and have been down horrendously. The fusion and focus are both made in Mexico already. Even being made there, they lose money when they sell a focus, and have a razor thin margin on the Fusion. Not to get political, but I think they probably got a heads-up about some new tariffs coming soon, in addition to Q1 sales being in the shitter.
They can't bring the focus back to Michigan (Wayne Assembly), because that plant has already been retooled to make the Ranger and Bronco starting next year.
This might seem like an overreaction, but it's not. They have slowly been updating and will continue updating plants to streamline production to where they can handle just about any vehicle. Same thing they did with their modular engines.
There's no sense in continuing to make a car that you don't make money on, but if the demand for cars increases it's not that hard to bring one back with the way they have set up the assembly plants. Not to mention the fact that the new SUVs have incredibly gas mileage.
Yes and no.
2018 Focus gets up to 40MPG highway
2018 EcoSport gets up to 29MPG highway
While SUV/CUVs are leaps and bounds from where they were a decade ago a 10MPG difference is significant and will drive commuters to 'imports'.
(note figures from Google)
What will drive commuters to different vehicles is the cost of a gallon of gas and consumer demand which, at the moment, is not in the direction of sedans. Ford is looking at increasing its profit margins and needs to realign its production to do so . Here is a Bloomberg piece that gives a bit more detail:
https://www.bloomberg.com/news/articles/2018-04-26/what-would-henry-thi…;
Because Ford is falling behind with electric / automated driver technology development, sticking to the car lines where the customers value those traits less may be a positive
I just bought a Fusion...I love the car but I do feel a little weird about it now...how are they going to keep their miles per gallon down as a company?
April 27th, 2018 at 12:44 PM ^
For whatever reason I really like the Fusion's look. The grill and headlights are well done. I've sort of wanted one for awhile, but to Hackett's point, don't really want a car. Stationwagon/ cross-over is as car as I want to get.
April 26th, 2018 at 10:16 PM ^
April 27th, 2018 at 11:34 AM ^
Yeah, same for me but 2012. Fuckin love this car. I was probably going to buy another one in a couple years, maybe the ST or RS, but I guess now I'll have to look elswhere. Oh well!
April 26th, 2018 at 12:54 PM ^
killed the Dart and 200
only build the 300, Charger and Challenger
Jeep and Ram are the cash cows
April 26th, 2018 at 12:54 PM ^
There are a lot of Fusion's out there. Seems weird.
April 26th, 2018 at 12:56 PM ^
April 26th, 2018 at 12:57 PM ^
Makes sense in today's environment. Low gas prices, economy doing decently, people buying trucks and SUVs again
What happens if gas shoots back up to 4 or 5 bucks a gallon and there's a recession?
It's like history repeating itself. Long term planning in this country is dead.
there are hybrid versions of almost all SUV's
gas prices go way up? switch over to the hybrid version
The Rav4 now beats the Camry and the CRV beats the Accord. Look at the Rogue and the Corolla. That was last year and these trends are only growing.
Top Ten Selling Vehicles in the 2017 in the US
| 2017 Rank | Vehicle | Type | 2017 Sales | 2016 Rank | 2016 Sales | % Chg |
| 1 | Ford F-Series | Truck | 896,764 | 1 | 820,799 | 9.30% |
| 2 | Chevy Silverado | Truck | 585,864 | 2 | 574,876 | 1.90% |
| 3 | Ram | Truck | 500,723 | 3 | 489,418 | 2.30% |
| 4 | Toyota RAV4 | CUV | 407,594 | 8 | 352,154 | 15.70% |
| 5 | Nissan Rogue | CUV | 403,465 | 10 | 329,904 | 22.30% |
| 6 | Toyota Camry | Car | 387,081 | 4 | 388,618 | -0.40% |
| 7 | Honda CRV | CUV | 377,895 | 7 | 357,335 | 5.80% |
| 8 | Honda Civic | Car | 377,286 | 6 | 366,927 | 2.80% |
| 9 | Toyota Corolla | Car | 329,196 | 5 | 378,210 | -13.00% |
| 10 | Honda Accord | Car | 322,655 | 9 | 345,225 | -6.50% |
Actual data, just what this thread needs!
Sales of crossovers have been better than cars. Crossovers cost nearly the same to build as cars, but sell at a higher price. A lot of them are built on car platforms, hence the build cost. There have been predictions that cars are going to go extinct because of this for a while.
I'm hoping to step into a Buick Regal TourX as my next vehicle. The world (or the US, at least) needs more station wagons. They are EVERYWHERE in Europe, already.
If I win the lottery I will drive immediately to the MB dealership to buy that wagon on the spot. 
Honda Accord is built in Ohio
Toyota Corolla made in Mississippi
Toyota Camry is made in TN & IN
Honda Civic built in Ohio
Hyundai & Kia have plants here as well
These vehicles can be produced profitably when they are built at scale (see above numbers 300k+). Ford has not been relentless enough in styling and quality focus which is why they have suffered.
And I am a Ford supplier fwiw
After comparing Civic to Focus at the auto show last year, I was in shock how much nicer the Civic was. And that's why when I bought a new car (old car was a Focus), I went with the Civic.
Pretty sure that most, if not all of these are non-UAW plants (too lazy to google, but I believe this to be true), which lowers the tranplants' mfg costs vs Ford which has all UAW plants.
Not a level playing field.
April 27th, 2018 at 11:31 AM ^
We will get new Chrysler K cars and GM X cars or other cars rushed to market when gas prices rise.
They'll bring over the Mondeo, Focus (which is all new! they have 5 versions and are just going to sell one here), and Fiesta from Europe, just like they did last time gas prices went up!
What happens if gas shoots back up to 4 or 5 bucks a gallon and there's a recession?
The thinking - and it's not unique to Ford - is that people will just downsize to a smaller crossover instead of going all the way down to small cars. Crossovers are getting fuel-efficient enough for them to do that. Hybrids are on their way to that segment too.
And worse comes to worst, the thread headline is misleading as Ford is not ceasing production of these cars, just selling them in North America. They can be brought back from overseas without having to start again from scratch.
So when they inevitably do bring back [more] sedans, they'll be imported from China instead of assembled in a Midwest USA factory? I think that's the real key takeaway here.
The simple fact is the most Americans prefer larger vehicles at this time. A car is more useful as a performance vehicle, but Ford is keeping the Mustang. A car is more fuel efficient, but Ford is planning on its lineup to be hybrid/electric. A car is better able to navigate cities, but with driverless vehicles expected in the next decade, it may be unnecessary to own a vehicle (or park it or feed it gas) in major cities. Ford is giving people want they want and is already importing the small vehicles to the U.S.
"Bring back" and "import" aren't synonyms. The Ranger is coming back, using basically the overseas version updated for American regulations, and being built in Michigan.
Do you see a marked increase in oil consumption in the horizon? Or massive decreases in oil production? Because the IEA (International Energy Agency) doesn't: In fact, it projects continued decreased oil demand from both the industrialized and emerging economies as renewables and electric vehicles continue to become more economical.
The current increase in oil is a combination of a 2 year campaign of OPEC + Russian production cuts, plus a weakening US dollar (oil is priced in dollars, thus dollar goes down, oil price goes up).
April 27th, 2018 at 12:52 PM ^
It's going to be interesting in 10-15 years when all of the vehicles are electric and all of the zombie apocolypse shows/movies are out of date. Carl and Rick can't hot wire a car in the future or have to find gas. All the cars will be solar powered and still work.
April 26th, 2018 at 12:59 PM ^
These are more flexible and safer for the passengers. It's why American suburban soccer moms transport the brood with SUVs that would have qualified as armored military troop carriers in the 1960's. The SUvs and trucks of today manage better mpg than sedans achieved during the 60's. Since the big stuff delivers a higher profit margin, Hackett is smart to eliminate barely-profitable sedans and the like. I'm sure Jim will give the workers affected the best treatment possible, he does have a soul.
most SUV's are BFI and no longer BOF / based off the Truck architectures
Economy and gas prices aside, people generally want the bigger SUVs and the pickups. It's just what they want. And the auto companies make more money off them.
And while I am no expert on global oil supply, it seems to me that in the last 5 to 10 years the world oil industry has become much more diversified and supply has expanded greatly due to new oil field discoveries and more efficient extraction methods. The deduction here would be that, outside of some major political entanglements, the available supply of cheap fuel is vast and therefore relatively stable. Add highly more efficient fuel economy and you could have stable fuel prices for a looonnnnggg time.
Can someone explain if bigger vehicles have a higher profit margin? This seems a bit drastic to me. Especially considering that a new presidential administration could move to tighten fuel efficiency standards and hurt SUV/truck sales.
Yes, there is. Ford (and GM and FCA) has been losing money on their car lines for years now and they've been scrambling recently to eliminate costs across the board. They have been discussing some pretty bold cost-saving moves and I think we'll see more of this soon.
Yes. They sell better and are very profitable.
I could be wrong, and someone closer to the industry can correct me, but a lot of this was driven by Hackett's "fitness" initiatives and raising their corporate profit margin from something like 5% to 8%, which makes the fact that it would take that many model cuts to do kind of interesting to me. I do know that, at least as of a few model years ago, most of the vehicles in the Top 10 of "most profitable" were SUVs and crossovers. I don't even remember seeing a sedan or anything not meant to carry a battalion, come to think of it.